Friday, May 22, 2009

Links 05/22/2009

Fannie Program Sees 70% Recidivism – Housingwire

“HSA is showing high redefault rates on the early offerings,” FHFA director James Lockhart noted in a Congressional report this week. “Performance on the February through April offerings shows a redefault [or recidivism] rate of almost 70%, which calls into question the program’s assumptions that borrowers have the capacity to make payments going forward.”

CONFIRMED: Jeff Macke Is Finished At CNBC – Clusterstock

CHART OF THE DAY: Credit Card Debt Swallows American Households – Clusterstock


Britain looks to the land of the rising sun with envy – Telegraph – Ambrose Evans-Pritchard

S&P said yesterday that UK debt is likely to reach 100pc of GDP in the "medium term" even if the Government tightens its belt. Prof Charles Goodhart from the London School of Economics said the danger is a debt compound trap when interest rates rise. "If that happens we're in real trouble. We could be close by next year," he said.

Lifestyle Liquidation - Estates of the Fabulously Rich – Mish

Inflation ‘Cure’ Exposed When In-Laws Move In: Caroline Baum – Bloomberg

Right now the investment community is divided over the direction of prices and the Fed’s ability to determining them: It’s either deflation or inflation, with no middle ground.

The deflation camp is looking at the burst credit bubble and the de-leveraging under way. Credit events are deflationary by nature: When lenders are hit with losses, they can’t make new loans.

The inflationists are looking at the Fed’s bloated balance sheet and the $877 billion of excess reserves banks are holding at the Fed. Pre-crisis they held some $1 billion to $2 billion of reserves over and above what they’re required to hold. The fear is that these reserves will morph into money -- and inflation -- quicker than the Fed can drain them from the banking system.

The last thing a central bank would want to add to this already potent brew is actual inflation of 6 percent.

Obama signs law curbing surprise credit card fees – The Associated Press

Bank speculating fuels rising gasoline prices – The Contra Costa Times

This time, Wall Street speculators — some of them recipients of billions of dollars in taxpayers' bailout money — may be to blame.

Big Wall Street banks such as Goldman Sachs & Co., Morgan Stanley and others are able to sidestep the regulations that limit investments in commodities such as oil, and they're investing on behalf of pension funds, endowments, hedge funds and other big institutional investors, in part as a hedge against rising inflation.

State jobless rate dips, but payrolls shrink – The San Francisco Chronicle

California's unemployment rate fell slightly to 11 percent in April, but the state lost 63,700 payroll jobs, in a pair of mixed signals that suggest the labor market continues to weaken but at a slower pace.

Five Things for Friday, May 22 – Kevin Depew, Minyanville

Keepin’ It Real Estate: The Sellers Are Coming - Be Very Afraid – Andrew Jeffrey, Minyanville

Economy Has Bottomed Out – The Onion